Disclosure Regimes and Corporate Governance

Journal of Institutional and Theoretical Economics, Vol. 159, pp. 717-726, 2003

11 Pages Posted: 3 Jun 2004

See all articles by Jens Wüstemann

Jens Wüstemann

University of Mannheim - Accounting and Taxation


As there is a strong relationship of disclosure regimes and corporate governance the internationally varying distribution of information rights can be interpreted as a function of different systems of corporate governance. A disclosure system comprises all legally recognized information claims that a system of corporate governance or a financial system furnishes financial contracting parties with: Both public disclosure and disclosure via private information channels may serve value-relevant information for suppliers of finance.

An analysis within the framework of the New Institutional Economics brings about two findings: First, looking at the distribution of informational rights from a contractual perspective shows that the nexus of information rights formed by accounting and disclosure regulation and the distribution of power in the firm are mutually determining. For example, the main financing parties in Germany, banks and blockholders, have fairly good access to information via institutionalized internal information channels. Secondly, internationally accepted sets of accounting standards may improve the monitoring by markets. Nevertheless, accounting and disclosure regulation sometimes resemble a cookbook and should be transformed in a more principle-based and deductive system. Furthermore the whole institutional design of corporate governance should be based on realistic assumptions about human decision making to serve the intended purposes.

Keywords: corporate governance, disclosure, behavioral economics, accounting, biases and heuristics, auditor report

JEL Classification: G30, G34, G39, M41, M44, M45, M47, M49

Suggested Citation

Wüstemann, Jens, Disclosure Regimes and Corporate Governance. Journal of Institutional and Theoretical Economics, Vol. 159, pp. 717-726, 2003, Available at SSRN: https://ssrn.com/abstract=554063

Jens Wüstemann (Contact Author)

University of Mannheim - Accounting and Taxation ( email )

Mannheim, 68131

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics